Well, maybe we were wrong. In an earlier analysis of Facebook’s value before the IPO, we suggested that Facebook was a piece of shit company and a terrible investment. Well, it is, but it’s a great vehicle for moving enormous amounts of money into the pockets of a select few. Check out this article from Wolf Richter on Testosterone Pit for the full story of how Facebook is just another corporate welfare recipient of this facist government.
Facebook filed its first 10-K annual report with the SEC, containing its financial statements for 2012 along with a host of small-print footnotes which presumably no one would ever look at. But the recalcitrant nonpartisan research and advocacy group, Citizens for Tax Justice, combed through it anyway.
And it found “an amazing admission”: despite $1.1 billion in pre-tax profits from its US operations in 2012, Facebook didn’t pay any federal or state income taxes in the US—in fact it will collect net tax refunds totaling $429 million.
Facebook is relying on a single tax break in our glorious corporate tax-dodge code to obtain its negative tax rate: the deductibility of executive and employee stock options. It cut Facebook’s federal and state income taxes by $1.03 billion last year—but that was just part of it. As Facebook said in its footnote under “Share-based Compensation,” on page 68 of the 10-K: “during the years ended December 31, 2012, 2011, and 2010, we realized tax benefits from share-based award activity of $1.03 billion, $433 million, and $115 million respectively.”
Another $2.17 billion of this US tax break is carried forward. To rub it in, COO Sheryl Sandberg giddily pointed out during the earnings call that the company “ended the year with a total of $5.8 billion in NOL tax loss carry forwards created by stock compensation”—to be used in future years.
So in short, Facebook is funneling huge amounts of money, stolen through their fraudulent IPO, to their top executives to go buy coke and hookers or go to Davos and chair the World Bad Guy Convention and then they get a tax refund? Fuck!
So it’s February, and I need to start working on my taxes. It takes hours and hours, as my tax situation appears to be quite complicated now that the US tax code is 73,608 pages. I always end up paying 40%ish of my income in taxes, with which the government wages war and gives to these Facebook motherfuckers.
Is anyone else paying attention?